airberlin's New CEO Comes Out Swinging
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airberlin used its annual pre-ITB press conference to unveil its newly appointed CEO Stefan Pichler to the media. With just four weeks as CEO under his belt, Pichler came out swinging with an overhaul of how the carrier has been doing business, fare categories, service enhancements and management restructuring that he plans to put into place in the next year.
Pichler’s so-called 2016 Turnaround Plan will come on in three phases, beginning first with management structures and processes, second with market segmentation and capacity adjustment, and thirdly with growth in airberlin’ European footprint. “We must be aware of our situation and have the courage to act swiftly,” he said.
Pichler struck an air that was both swift and confident, asserting product strengths despite its well-heralded recent struggles.
“Our company strategy is clear: we are a European multi-hub airline with four major advantages over our competitors: we produce with lower unit costs than other network carriers, a lead we want to further extend by consistent revenue management; we have a strong touristic sales organization; we have an expandable position in strong catchment areas and we can count on our employees and their loyalty and excitement.”
Pichler has gone aggressively after a change in corporate culture immediately, with an eye toward establishing stability and vertical communication. He has been holding town hall meetings with employees at various airberlin hubs in order to hear out his work force and get them behind him. “You can’t turn it around at the round table. It’s got to be an effort from the whole company.” And just to emphasize the sense of urgency, he reminded everyone, “I am the fourth CEO in three years.”
Pichler installed feedback boxes and promised to look at every suggestion when it comes in and to respond to it within a week’s time. He also emphasized several times that the airline would begin listening more closely to the customers. “If you listen to your customers they will lead you where you need to go.” New JustFly fares exemplify the new CEO’s willingness to listen and act upon what he hears.
Pichler is targeting profitability by the spring of 2016 when he also plans to complete the first two phases of his strategy. “We can’t wait for 2017 to be profitable,” he said in his conference. “We need to follow a clear corporate strategy. We can’t wait for the new airport to open in Berlin. We have multiple hubs now in Dusseldorf, Stuttgart and Vienna. They’re in strong catchment areas. Within 120 minutes of car driving from Dusseldorf Airport there are 37 million people, unfortunately we are only getting 34 percent of market share there.
“We need to grow that. Twenty to 30 percent market share is not enough. We will focus on point to point because that is what has been stable throughout this economic crisis. Some 65 percent of our revenue comes from touristic sales. We have long standing relationships with more than 100 tour operators. We need to establish a fair distribution of risk and opportunity.” He also indicated that he will take a closer look at airberlin Holidays.
Airberlin released a new fare structure that will go into place on May 5. The carrier is introducing “JustFly” a low cost intra-European option with prices beginning at € 44 for passengers traveling only with carry on. “Feedback from our customers was quite direct,” said Pichler, “especially from those who often fly on short trips with just their hand baggage as now they can get an even better deal with us than ever before. The new fares are ideally adapted to key target groups and as a result will attract new passengers for airberlin.” Three more fare categories: FlyDeal, FlyClassic, and FlyFlex, will come later on.
In 2015, airberlin will increase service to the Caribbean. It will also expand service to Italy with its new partner in Etihad, Alitalia. With its Oneworld partner, American Airlines it will tap into some 2,500 codeshare flights per week and will serve New York, Miami, Fort Meyers and Los Angeles.
Pichler most recently served as CEO at Fiji Airways where he helped turn that carrier, the former Air Pacific, completely around and left it a profitable airline with a new branding. Pichler is also a veteran of such companies as Nike, Lufthansa, Thomas Cook, Virgin Blue Airlines, Virgin Australia and Jazeera Airways.
Pichler most recently served as CEO at Fiji Airways where he helped turn that carrier, the former Air Pacific, completely around and left it a profitable airline with a new branding. Pichler is also a veteran of such companies as Nike, Lufthansa, Thomas Cook, Virgin Blue Airlines, V Australia and Jazeera Airways.
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